Londoners are most likely to have life insurance and a higher amount of cover compared with their regional counterparts, according to new research.
Protection broker LifeSearch today (November 27) published its 'Health, Wealth & Happiness Report 2018', which found London’s life cover valued at £129,484, which was almost double Scotland’s average at £69,792, which ranked at the bottom of the value table.
In comparison, the average value of life insurance policies in the UK was found to be £105,303 and London residents were most likely to have cover.
The lowest uptake of life cover was found to be in the West Midlands, where 63 per cent of the population lacked insurance.
The report is based on a survey of 2008 UK adults, the analysis of which LifeSearch has used to identify a 'Catastrophe Life Cover Gap'.
Tom Baigrie, chief executive at LifeSearch, said: "After marrying up the findings on what people say makes them happy and unhappy, with how people say they protect themselves and their families against the catastrophe of potentially losing their income through disability or death, we’ve identified what we’re calling the 'Catastrophe Life Cover Gap'.
"This is where a person’s situation highlights to us that having life cover in place would be good for their peace of mind, but they’ve not protected themselves in this way."
As advisers, we need to tackle these assumptions: that the risk of death before retirement is low, that life insurance is expensive, and that it only pays out around a third of the time...Tom ConnerTom Conner, director at Drewberry, said his company’s own protection survey of 3,000 UK workers found there was a "perfect storm" in the life insurance sector hampering the uptake of protection.
Mr Conner said: "There is a three-pronged roadblock getting in the way of people taking out cover."
Mr Conner identified the "three prongs" to be an underestimated risk of death, overestimated cost of cover and misconceptions regarding policy pay out rates.
He said: "As advisers, we need to tackle these assumptions: that the risk of death before retirement is low, that life insurance is expensive, and that it only pays out around a third of the time.
"We need to come together to change people's perceptions to improve uptake of this valuable protection."
LifeSearch’s 'Health, Wealth & Happiness Report' also found the average cover value of a male policyholder to be higher than his female equivalent, at £113,032 compared with £94,759.
Mr Conner said: "Unfortunately, women tend to undervalue their contributions to a household.
"This is often because it's still the case that many women are earning less than their partners as they deal with the intricacies of balancing their working lives with familial responsibilities."
He added: "Even where one partner in a household is a stay-at-home parent and doesn't have any earning capacity, Drewberry will sometimes recommend life insurance for them depending on their circumstances.
"This is because, without the stay-at-home parent's contributions to childcare and running the household, the working partner would likely have to cut their hours to fill in for a deceased stay-at-home parent or find the money to pay for expensive childcare."
rachel.addison@ft.com
